Asset Allocation Update Some surprising factors at work in the US stock market The recent performance of different “factors” in the US stock market may seem surprising during the outbreak of coronavirus, given the adverse implications for the economy of the measures taken to... 12th May 2020 · 3 mins read
Asset Allocation Update Worst-hit EM sovereign $ bonds likely to recover most We expect the returns from EM sovereign dollar bonds to be quite strong over the next few years, as the global economy gradually recovers. With some notable exceptions, we think that the dollar bonds... 5th May 2020 · 4 mins read
Asset Allocation Update US mega caps could be key to UK’s relative fortunes We suspect that the recent underperformance of MSCI’s UK Index relative to its USA Index will peter out when the world starts to get back to normal after coronavirus. 27th April 2020 · 4 mins read
Asset Allocation Update We doubt that gold will continue to outperform While gold has rallied over the past month, we don’t think that it will continue to outperform most other asset classes in the way that it did in the aftermath of the Global Financial Crisis (GFC). On... 22nd April 2020 · 4 mins read
Asset Allocation Update S&P’s outperformance may endure if big remains best The S&P 500’s outperformance of many benchmark indices outside the US since the outbreak of coronavirus may not be surprising, given that it was also a salient feature of much of the previous decade... 17th April 2020 · 3 mins read
Asset Allocation Update Energy commodities unlikely to outperform equities Although energy commodities have substantially underperformed global equities in recent months, we think that the returns from both will be broadly similar over the remainder of 2020 if, as we expect... 8th April 2020 · 4 mins read
Asset Allocation Update Commercial property likely to avoid the rout in REITs Although real estate investment trusts (REITs) were clobbered during the recent market turmoil, their performance over short periods is often comparable to that of equites, which were also hammered... 8th April 2020 · 3 mins read
Asset Allocation Update EM Equities in Latam and EMEA likely to outperform Given how far they have fallen, we think EM equities in Latin America and EMEA will outperform their Asian peers once the coronavirus comes under control, even if the economic fallout in the former... 1st April 2020 · 4 mins read
Asset Allocation Update Will the fire selling of haven assets last? The surprising weakness of Treasuries alongside the collapse in US equity prices recently seems to have been driven by fire selling, not worries about inflation or debt. However, even if further falls... 20th March 2020 · 3 mins read
Asset Allocation Update The sun may yet rise on Japan’s stock market Although Japan’s stock market has persistently underperformed its US counterpart since the financial crisis, there are several reasons why it may not continue to lag during the rest of this year and... 13th February 2020 · 2 mins read
Asset Allocation Update Poor returns likely from US corporate bonds & stocks We think that the returns from US corporate bonds and equities will be nowhere near as good in 2020 as they were in 2019, given the outlook for Treasury yields, credit spreads, and corporate earnings. 3rd February 2020 · 2 mins read
Asset Allocation Update It could soon be time to downsize We don’t expect the recent marked outperformance of US mega-cap equities to continue during the rest of this year and suspect that it will unwind if a Democrat wins the race to the White House. 23rd January 2020 · 2 mins read
Asset Allocation Update Gulf in S&P 500 and Treasury returns likely to shrink We expect the S&P 500 to outperform Treasuries by much less in 2020 than in 2019, as government bond yields edge up, the equity risk premium stops tumbling, and corporate earnings continue to... 13th January 2020 · 3 mins read
Asset Allocation Update Examining the case for euro-zone equities Our baseline assumption is that the returns in common currency from mid- and large-cap equities will be similar in the euro-zone and the US in 2020, after a decade in which those in the US have... 4th December 2019 · 5 mins read
Asset Allocation Update Relative equity valuations – mind the gap One reason to think that the relentless outperformance of the US stock market since the Global Financial Crisis (GFC) will not continue for another decade is its valuation, which has become... 15th November 2019 · 5 mins read